IBJNews

Fortune Industries plans to exit PEO business

Back to TopCommentsE-mailPrintBookmark and Share

Indianapolis-based Fortune Industries Inc. wants to exit the professional employer organization business in favor of becoming a skilled-nursing operator following the recent death of its founder.

Fortune Industries submitted its complicated restructuring plan late last month to the Securities and Exchange Commission for its review.

Under the unusual proposal, Fortune Industries would remain a public company and abandon its previous plan to be taken private.

The restructuring hinges on shareholder approval of a merger agreement with skilled-nursing operator Ide Management Group LLC of Greenfield.

The merger would be accomplished by giving IMG CEO Mark Ide shares in Fortune Industries. Founded by Ide in 1997, IMG owns or manages 20 skilled-nursing facilities in Indiana, Illinois, Iowa and Wisconsin.

Carter Fortune, 70, majority shareholder of Fortune Industries, had been diagnosed with a potentially terminal disease before his death in late August, according to an SEC filing.

Fortune Industries disclosed Fortune’s illness as it worked on a sale of the business to CEP Inc., a holding company led by Fortune Industries CEO Tena Mayberry and Chief Financial Officer Randy Butler. The planned management-led buyout, which would have resulted in the business going private, valued the company at $30.5 million.

Under the deal, Carter Fortune’s ownership stake in the business would have shrunk from 60 percent to 20 percent.

Mayberry and Butler now plan to acquire those shares from Carter’s estate and use them to buy out Fortune Industries’ PEO subsidiaries, which would operate within CEP.

CEP would be privately held and based in Nashville, Tenn. Both Mayberry and Butler would no longer be a part of Fortune Industries.

Mayberry became CEO of Fortune Industries in January 2010 and previously had served a dual role as president of both Fortune and subsidiary Century II Inc., a Brentwood, Tenn.-based provider of human resources services.

Meanwhile, Fortune Industries on Friday reported annual earnings for the fiscal year ended June 30.

Company profit fell to $926,000, or 6 cents per share, from $1.3 million, or 9 cents per share, the previous fiscal year.

Revenue declined 5 percent, to $60.9 million.

Fortune Industries attributed the drop in revenue to the loss of two large clients.

Company shares rose 1 cent Monday morning, to 24 cents each.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. PJ - Mall operators like Simon, and most developers/ land owners, establish individual legal entities for each property to avoid having a problem location sink the ship, or simply structure the note to exclude anything but the property acting as collateral. Usually both. The big banks that lend are big boys that know the risks and aren't mad at Simon for forking over the deed and walking away.

  2. Do any of the East side residence think that Macy, JC Penny's and the other national tenants would have letft the mall if they were making money?? I have read several post about how Simon neglected the property but it sounds like the Eastsiders stopped shopping at the mall even when it was full with all of the national retailers that you want to come back to the mall. I used to work at the Dick's at Washington Square and I know for a fact it's the worst performing Dick's in the Indianapolis market. You better start shopping there before it closes also.

  3. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

  4. If you only knew....

  5. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

ADVERTISEMENT